Tom Lee, Head of Research at Fundstrat Global Advisors, believes U.S. equities could be approaching their lowest levels for the first half of 2025, suggesting the recent market turbulence may represent a buying opportunity despite ongoing concerns.

What Happened: “I think there’s a good chance we’re making our lows for the first half like this week,” Lee said during an appearance on the RiskReversal Podcast. “The reality is that a lot of bad news has gotten priced in.”

Markets have faced pressure since President Donald Trump’s inauguration, with the S&P 500, tracked by SPDR S&P 500 ETF (NYSE:SPY), down 1.57% to 5,954, while the Nasdaq-100, monitored by Invesco QQQ Trust (NASDAQ:QQQ), has fallen 3.16% to 20,884.

Cryptocurrency markets have experienced even steeper declines, with Bitcoin (CRYPTO: BTC) dropping 28% from January highs before recovering to $92,217.

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Why It Matters: Lee attributed current market uncertainty to investors processing multiple risk factors, particularly concerns about Trump’s tariff plans and their potential economic impact. However, he noted that retail sentiment has reached bearish levels comparable to the fall of 2022, suggesting excessive pessimism.

“Retail sentiment is at the levels that were at the depths of that recent bear market,” Lee said. “Investors view this as a crisis when it’s really a growth scare.”

While acknowledging employment challenges ahead, Lee identified potential investment opportunities, particularly in financial stocks. “I think sleeper winners from all of this is going to be the financials because they’ve underperformed the last 15 years,” he said, noting that many banks have demonstrated profitability despite challenging conditions.

Lee also highlighted opportunities in digital assets and small-cap companies, particularly those focused on the American market, which could benefit from lower interest rates and attractive valuations once tariff concerns subside.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.